Question

Assuming Net Income for the year is $250,000, what is the net operating cash flows given the following information:

Increase in Salaries Payable $19,500
Depreciation Expense $6,000
Increase in Prepaid Rent $29,000
Loss on sale of asset $1,350
Increase in Accounts Payable $29,000
Increase in Inventory $61,000
a) $338,650
b) $215,850
c) $244,850
d) $250,850

Answer 1

Operating Cash Flows $215,850

Step-by-step explanation:

Calaculation of Net operating Cash flow

Net Income$250,000

Adjustments for noncash effects:

Depreciation Expense 6,000

Loss on sale of asset 1,350

Changes in current assets and current liabilities:

Increase in Salaries Payable 19,500

Increase in Prepaid Rent(29,000)

Increase in Accounts Payable 29,000

Increase in Inventory(61,000)

Operating Cash Flows $215,850